What the rise of the smart speaker might mean for podcasts (and on-demand audio in general)

Editor’s note: Hot Pod is a weekly newsletter on the podcasting industry written by Nick Quah; we happily share it with Nieman Lab readers each Tuesday.

Welcome to Hot Pod, a newsletter about podcasts. This is issue 146, published January 9, 2018.

Just a heads up: I’m told that the Interactive Advertising Bureau (IAB) will indeed be publishing a 2018 update to its podcast advertising study, which means we’ll be able to get at least one contiguous read of the industry’s year-over-year ad revenue growth.

As a reminder, the IAB’s inaugural podcast advertising report, which dropped last summer, found that the industry brought in $119 million in 2016 and was projected to bring in $220 million by the end of 2017. We’ll see how that projection holds up.

And once again, the report’s methodology revolves around the study a bundle of major podcast publishers, which means that it’s not meant to be comprehensive but representative. Think a stock market index like, say, the Dow Jones Industrial Average (sorta), along with all the benefits and limitations of using that indicator to discern something about the overall stock market and economy.

Don’t rat me out, Alexa. The International Consumer Electronics Show (CES) is happening this week, and in the spirit of that fine mess, I thought it might be a good time to review what’s been going on with smart speakers. It’s the device, after all, that may prove to be a significant new frontier for on-demand audio consumption.

Smart speakers have become, perhaps improbably, one of the more prominent technology categories over the past few years. A recent report by Canalys, a research firm, found that the smart speaker has surpassed AR, VR, and wearables in market share, becoming the fastest growing consumer technology in recent times, according to a ZDNet write-up. Over 30 million smart speaker units — including the Amazon Echo, Google Home, and so on — were shipped worldwide last year, with 16.1 million units shipped in the fourth quarter alone. That trend of rapid growth is expected to continue this year, with Canalys projecting 70 percent year-over-year worldwide shipment growth totaling up to 56 million units by the end of 2018. (If you’re looking for further detail and context, this summary by The Guardian is pretty succinct.)

The Amazon Echo lies at the forefront of the category, with the Google Home serving as a fairly distant second. (Apple’s own entry, the HomePod, is scheduled to roll out sometime early this year, following delays.) Amazon’s lead on its competitors is said to be considerable, given its longer time in the market — the device rolled out in mid-2015 — and aggressive pace in terms of product iteration and distribution (Amazon Echoes next to the deli counter at Whole Foods, y’know?). But one should expect a fight from other tech giants, most notably Google, which is estimated to have sold at least 6.73 million units since its October launch, as they move to close the gap on this new front of computing while trying to keep newer competitors at bay. One expression of this: analysts have noted that both Amazon and Google engaged in deep price discounting over the holiday season in the run-up to the launch of the pricier Apple HomePod, which has resulted in the two companies losing money in the short term but creating a slightly less accommodating environment for Apple’s entry into the market, as Reuters reported.

And let us not forget what’s happening outside the probable Big Three: over the past few months, other hardware makers — including Roku, Samsung, Harman, LG, Sonos, and JBL — have put forward their own takes on the smart speaker category as well.

So, what does this all mean for podcasts, or on-demand audio content publishers more generally? A couple of thoughts:

At this point in time, podcast consumption behavior can generally be broken down along two tracks: you have listening directly off traditional computers, and you have listening off mobile devices — smartphones, tablets, portable devices, etc. — with the smartphone, I believe, being the core distribution point in this track. This setup is reflected in Edison Research’s studies on device usage among podcast listeners, which has thus far expressed a trend in which listening has shifted away from desktop toward mobile over the years. The emergence of smart speakers introduces a third track into the mix, and how listening behavior gets reallocated between smartphones and smart speakers is going to be the dynamic to watch over time. Let’s see if podcast listening actually shifts toward smart speakers to the zero-sum detriment of smartphones (and desktop).

Or perhaps there’s a more complex outcome: “podcast listening” doesn’t shift over, but non-music smart speaker audio content originates as a category of its own that locates “podcasting” as a specific phenomena within the Apple ecosystem. Should that be the case, we’re going to be awash with further taxonomical questions, which are both necessary and completely annoying.

There’s a whole other side to this question of choice: how will these smart speakers choose to bring in and orient non-music audio content within the user experience? Based on what’s already been happening, it occurs to me that we’re going to see a dramatic reliance on platforms: not just Spotify, TuneIn, Pandora, and iHeartRadio (pending whatever’s going on with their counts, more on that later) as curation portals of podcast publishers spanning indies to major organizations, but also organizations big and prominent enough to develop their own apps for these devices, like NPR and The New York Times. Should “podcast listening” indeed spill into the smart speaker ecosystem, we’re bound to see this platform-conflict dynamic play itself out once again. Unless, of course, we see one such platform adopt a distinctly Apple-like, hands-off, semi-open middleman approach as we have historically seen between Apple, its iTunes architecture, and the early-to-mid stage podcast community.

There is also, of course, the possibility that smart speaker operators will themselves make choices about primary content distribution. An example of this: Apple readying an audio news feature for its upcoming HomePod release that delivers content from the Washington Post by default — see: the power of defaults — though HomePod owners have the option to switch off to Fox News, CNN, or NPR.

This is all to say that it’s unclear to me whether the podcast medium’s relative openness will be retained should there be a considerable listening shift toward smart speakers. Just a thought.

One more thing: what’s wild about all of this is how much this echoes the dynamics, structures, and limitations that exists in the fight for the automobile media dashboard.

[insert super casual segue here]

They see me rollin’. This one’s a little late, but it’s worth tying into the previous item, given thematic linkage. At the end of December, General Motors announced that it was rolling out in-car podcast availability for some of its newer models, a fleet size that reportedly numbers around a million cars. This is slightly less noteworthy than it sounds.

To begin with: only a few podcast publishers were given the opportunity to develop their own apps for distribution content in these cars, including The New York Times, The Washington Post, Fox Sports, and USA Today. These publisher-specific apps join an in-car media ecosystem that already includes more general audio distribution platforms like Spotify and iHeartRadio, many of which have steadily increased their own capacities as podcast distributors over the past few years. The question worth asking is whether this addition features a substantial step up for greater listening ease: after all, car owners could long consume podcasts during their drives if they were willing to fiddle around with various Bluetooth setups or mobile device platform integrations like Apple CarPlay and Android Auto.

The automobile media dashboard is an overwhelming point of interest for audio publishers of all stripes, as it is a site that pits traditional broadcast airwaves against satellite radio against Internet radio streams against on-demand audio. But the fundamental dynamic of this conflict lies in how car media incumbents have long held a structural advantage due to the considerable amount of time it takes for car ownership to turn over, as well as the fact that the car is essentially a choke-point where consumer preferences over relatively minute design choices (like media options) are still superseded by preferences established in corporate relationships. As such, it is also a glacial, protracted fight, one that can be hard to keep track of but that portends considerable gains.

Gimlet furthers its brand ambitions. Gimlet really wants to break out into something much bigger, huh? To that end, the Brooklyn-based podcast company has hired its first Chief Marketing Officer: Jenny Wall, who served as Hulu’s SVP and head of marketing for three years before exiting the streaming service last May.

At Hulu, Wall oversaw the launches of Hulu’s own original shows, including The Handmaid’s Tale, Difficult People, and Casual, in addition to the service’s commercial-free offering and Live TV bundle. She joined the company in 2014 from Netflix, where she built brand and promotional campaigns for its initial slate of original programming that includes House of Cards, Orange is the New Black, and the Arrested Development revival season.

Wall’s considerable expertise building campaigns around original programming for streaming platforms, as well as what appears to be a penchant for working at companies that aggressively grapple with rapidly evolving distribution, branding, and monetization models, make this hire an utterly compelling development. One imagines that she’ll bring her experiences to bear on Gimlet’s ambitions toward becoming the so-called “HBO of Audio” — oh, here’s another fun fact: earlier in her career, Wall worked on the famed “It’s not TV, it’s HBO” campaign — and, in the process, perhaps write the initial playbook for podcast companies looking to elevate beyond a scrappy, independent vibe into… well, something else entirely.

This recruitment comes about a month after Gimlet’s last round of high-level hire announcements. In December, the company brought on a new head of fiction, a new editor, and a new head of product.

While we’re talking prestige TV… This is podcast-adjacent, but whatever: Apple, in pursuit of a formidable TV strategy to measure up against Netflix and Hulu, is commissioning an original TV show based on Kathleen Barber’s 2017 novel Are You Sleeping, which is about a true crime podcast gone viral. The novel is said to be conceptually interested in the country’s relationship with true crime and true crime podcasts, along with how public performances of journalism blur the lines of entertainment and ethics. On the one hand, you could say it’s a work of fiction that explores the complexities of podcast phenomena that extend from Serial to Missing Richard Simmons to Up and Vanished. But on the other hand, it sounds like an examination that could be broadened out and applied to so many other forms of journalism as well.

Anyway, some noteworthy details about the TV project: Octavia Spencer is set to star, Serial Productions’ Sarah Koenig is set to consult, and Reese Witherspoon is set to executive produce. This project further serves to grow Witherspoon’s footprint as a powerful Hollywood producer, a role that she has been cultivating through her production company Hello Sunshine. According to The Hollywood Reporter, Are You Sleeping is “the first development project to land at Apple, which previously commissioned three straight-to-series orders.” It’s also the second project between Witherspoon and Apple.

I haven’t read Are You Sleeping yet, but I suppose its existence — along with the constellations of ingredients that make up the TV project around it — could perhaps be interpreted as some further evidence toward the notion that true crime, as a genre, is truly podcasting’s beating, bloody heart. At least, at this point in time.

And a little bonus: Kathleen Barber was a guest on WAMU’s The Big Listen, the station’s podcast-broadcast about podcasts and beyond, back in September to talk about the book.

NPR outlook. “The thing that hovers over all of this is our desire for our audio to be everywhere,” Neal Carruth, the public radio mothership’s GM of podcasts, told me. “But also to have experiences be properly tailored for each of those new platforms.”

Yeah, yeah. I know. Look, I hear the complaints that I write too much about NPR. (And Gimlet, and Panoply, and Midroll, and The New York Times, and even Night Vale Presents, which is weird.) But come on. NPR is a distinctly complex problem to think through: how does the organization balance the responsibilities of serving a broader multi-sided system and weather a shifting environment that radically changes the terms of your original responsibilities while continuing to operate at the highest possible level? It’s fascinating!

Anyway, I recently spoke to Carruth about his view on NPR’s podcast division in the coming year, and from our conversation, it struck me that you could broadly organize the strategy into four discrete parts:

Develop and launch new projects (though Carruth declined to say with any certainty what the volume and nature of those rollouts will look like this year);

Continue supporting and expanding existing podcast properties;

Experiment with new forms and distribution models, including over voice-activated platforms;

Explore and operationalize new ways for individual member stations to extract value from successful podcast products.

You can see many of these goals at play in a few moves that NPR has been executing in and around the turn of the new year. They include:

(1) Wrapping up a podcast-fronted donation referral campaign, in which NPR podcasts were weaponized to urge listeners to contribute to their local radio stations — an initiative that more overtly reflects how the value of NPR’s podcast gains can trickle down to the rest of the system.

(2) Completing the full roll-out of the Planet Money spin-off known as The Indicator, which now publishes episodes daily with Stacey Vanek Smith and Cardiff Garcia on hosting duties.

(3) Expanding Embedded, its investigative podcast series, a move that includes Kelly McEvers stepping down as co-host on All Things Considered to focus on Embedded full-time, as well as growing the production team. “We’re still in the process of figuring out what Embedded 2.0 is going to look like,” Carruth said, adding that they’re looking to add managing producer and another producer to its ranks. “The hope is to create a premier platform for deep-dive, investigative storytelling.” I think we’ve seen a good bit of that evolution already. Last year, Embedded switched its format from the classic documentary anthology structure — with each episode covering a different story — into mini-season-long thematic dives, between its examination of police videos in February and the Trump universe in October, November, and a little more in the coming weeks.

All this raises the question: what, exactly, is NPR’s mandate for its podcast team? Sure, the public radio mothership has to keep pumping out programming and new projects — a major news organization, after all, is built on its consistency, presence, and industriousness — but are they also incentivized to, say, spawn blockbusters and create the next S-Town?

Carruth seems to lean away from that. “Obviously, you want shows to be successful and you want them to find their audience,” he said. “Success doesn’t necessarily mean a giant audience for every show. In some cases, we’re trying to find new audiences, whether it’s a younger segment or a more diverse segment. Sometimes it’s just a longer play that you need patience to see through to the benefits.” Invisibilia’s wildly successful and attention-grabbing debut season seems so long ago.

I suppose it’s worth remembering that the organization’s operational imperatives remain rooted in its defining condition: its relationship to the broader ecosystem of local public radio stations. To that end, NPR appears focused on ensuring that its podcasting gains can be systematically drawn and quartered for equitable value dispersion across that network. And they have been doing this: Carruth points to podcasts that were later adapted into full broadcast offerings for radio stations (It’s Been a Minute is a good example) and podcasts whose individual reports were later repackaged as segments for news magazines.

From this vantage point, all of NPR’s podcasting wins and wonder seem to fall from being able to satisfy that complex, multi-part structure in the steadiest way possible. Flashiness is harder to come by in this particular challenge, but perhaps succeeding stylishly isn’t exactly the point.

Speaking of The Indicator… This year will mark the tenth anniversary of Planet Money, which, as some might remember, originated from a reporting project developed during the Great Recession to accessibly explain just what the hell was happening to the world around us. That project, which was called “The Giant Pool of Money,” was produced by Alex Blumberg and Adam Davidson for This American Life, and its success spring-boarded the duo towards the creation of Planet Money at NPR. In those early days, the podcast published daily, and some of its episodes featured a much-beloved segment called “The Indicator.”

Blumberg and Davidson have since left Planet Money for other pursuits. (Blumberg, of course, went to found Gimlet Media, while Davidson now serves as a staff writer at The New Yorker.) Ten years on, and Planet Money is still delivering a steady stream of tightly produced explainers about the economy. The show has published well over 800 episodes, and its current hosting roster includes the talents of Ailsa Chang, Jacob Goldstein, Kenny Malone, Noel King, and Robert Smith, with managing producer Alex Goldmark leading the charge. Per NPR’s internal analytics tool Splunk, the podcast averages a weekly audience of 1 million users.

Spinning off The Indicator marks a rare structural innovation for the long-running operation, and its daily bite-sized format suggests a distinctly modern orientation, given the increasing preponderance of daily new podcasts. That said, Carruth doesn’t necessarily view The Indicator as part of that cohort. “We think of it more as a daily insight show,” he said. While editorially alive to the news cycle around it, The Indicator is said to gesture more toward the temporal sweet spot between newsiness and an evergreen disposition.

Anyway: Mazel tov, Planet Money!

What’s going on with Podtrac? This is a sticky one. Last Tuesday, the Australian radio analyst James Cridland published an article on his Podnews.net blog that investigated a curious question: “Is iHeartMedia really the leader in ‘snackable’ podcasts?” Podtrac, the podcast measurement company, had just added a new short-form category to its set of industry rankers, and iHeartMedia had, quite improbably, populated seven out of ten spots on the debut list.

Cridland’s examination ultimately found that iHeartMedia’s presence on Podtrac’s charts — not just its “snackable” category, but on all lists — had greatly benefited from a methodological discrepancy. “We’ve discovered that Podtrac’s measurement hasn’t been measuring listening, but something else entirely: the total pageviews for all of iHeartMedia’s 850 radio stations,” he wrote. The crux of the problem seems to hinge on iHeartMedia’s liberal use of embedded players throughout its considerable affiliate website ecosystem. Those players automatically pre-load audio files by default, and in doing so, inadvertently register as a count by Podtrac’s measurement system whether or not a real human actually clicks and listens. Cridland concludes, then, that it’s theoretically possible for podcasts to chart highly without actually being consumed, and that iHeartMedia’s podcast figures as a result are highly overstated. You should check out the post in full, as Cridland walks through the technical components of his examination.

Podtrac has since revised its rankings, removing iHeartMedia from the lists entirely. On its blog, the company briefly discussed the revision, noting that iHeartMedia’s use of preloads on its website players was inconsistent with IAB measurement guidelines.

“We were not aware of the pre-loading behavior of the iHeart affiliate site web players,” Velvet Beard, Podtrac’s VP of analytics, told me. “While we have had algorithms in place to identify anomalies in the download data we see, we have put into place new procedures including those to identify situations where an inordinate amount of traffic comes from websites which will alert us to this situation in the future.”

When I reached out to iHeartMedia SVP of podcasting Chris Peterson, he wrote: “We are working through with Podtrac what constitutes listening, because we have so many platforms and so many ways that listeners come to podcasts that other companies don’t have available. Given our audience size and unique platforms we need to determine with them the best way to fairly capture our total listening usage and ensure it fits their criteria.”

The two are currently assessing the situation, and how to move forward.

In October, Podtrac’s public publisher ranker listed iHeartMedia in the second spot under NPR, where the company was described to reach slightly under 9 million monthly unique U.S. listeners and over 33.5 million unique global downloads over a whopping 525 shows. It is unclear what iHeartMedia’s actual podcast reach will look like after accounting for the embedded player pre-loads.

A couple of things on this:

This incident is pretty embarrassing for both companies, but particularly so for Podtrac. The company’s industry rankers have already long been the subject of skepticism — I wrote about the core problems when they first launched in 2016, which mostly had to do with their incomplete sampling of the industry as a whole, and expressed confusion over iHeartMedia’s improbable presence in the ranker back in November — but the fact that Podtrac missed what could be charitably phrased as an inadvertent gaming of its system raises questions over its technical acumen, particularly given its core work of verifying downloads in the space. Yikes.

Podtrac’s rankers matter, whether we like it or not. Beyond the Apple Podcast charts, they remain one of the very few sources of public information and representation giving some semblance of shape to the podcast industry. They further serve as raw research material for newer or casual patrons of the space — be they listeners or advertisers — who hope to get a sense of its shape, size, and order. It’s also worth noting that high placement on the chart has historically served as ammunition for podcast publishers looking to seed press mentions. Case in point: in a November Axios article, iHeartMedia’s second spot placement on the Podtrac ranker was deployed as substantive detail in the company’s bid to be position its “Middle America”-facing original programming slate. Without the perceived credibility stemming from that Podtrac ranker placement, it’s debatable whether that story would have actually earned its newsworthiness.

The core need remains the same: some service that helps publishers, advertisers, listeners, and beyond develop a better sense of whether a show or a network that says it’s big is actually what it says it is. In other words, we still very much have a need for a systemic check on potential misrepresentation, inadvertent or otherwise.

Ottawa’s Great Canadian Theatre Company is playing around with the possibility of distributing recordings of some performances through a podcast feed. (CBC)

Later this year, Night Vale Presents expects to see the return of Alice Isn’t Dead (spring), Conversations with People Who Hate Me (spring), Within the Wires (fall), and The Orbiting Human Circus (of the Air).

Stitcher’s First Day Back is at work on its third season, but will be releasing a limited-run interview series called First Day Back Conversations.

WNYC’s Nancy and Sooo Many White Guys will return for new seasons in the first half of the year.

Just a quick plug for Boise State Public Radio getting on that Hearken train. I friggin’ love this city, and “Wanna Know About Idaho” is a gem.

Photo of Amazon Echo for sale at Whole Foods by Phillip Pessar used under a Creative Commons license.